Agriculture Sector _ Economics
Click here to load reader
-
Upload
sujata-mansukhani -
Category
Documents
-
view
16 -
download
2
description
Transcript of Agriculture Sector _ Economics
AGRICULTURAL SECTOR IN INDIA
Agriculture Sector of Indian Economy is one of the most significant parts of India.
Agriculture is the only means of living for almost two-thirds of the employed class in India.
As being stated by the economic data of financial year 2006-07, agriculture has acquired 18
percent of India's GDP.
The agriculture sector of India has occupied almost 43 percent of India's
geographical area. Agriculture is still the only largest contributor to India's GDP even after
a decline in the same in the agriculture share of India. Agriculture also plays a significant
role in the growth of socio-economic sector in India.
In the earlier times, India was largely dependent upon food imports but the successive
stories of the agriculture sector of Indian economy have made it self-sufficing in grain
production. The country also has substantial reserves for the same. India depends heavily
on the agriculture sector, especially on the food production unit after the 1960 crisis in
food sector. Since then, India has put a lot of effort to be self-sufficient in the food
production and this endeavor of India has led to the Green Revolution. The Green
Revolution came into existence with the aim to improve the agriculture in India.
The services enhanced by the Green Revolution in the agriculture sector of Indian
economy are as follows:
Acquiring more area for cultivation purposes
Expanding irrigation facilities
Use of improved and advanced high-yielding variety of seeds
Implementing better techniques that emerged from agriculture research
Water management
Plan protection activities through prudent use of fertilizers, pesticides, and cropping
applications
All these measures taken by the Green Revolution led to an alarming rise in the wheat
and rice production of India's agriculture. Considering the quantum leap witnessed by the
wheat and rice production unit of India's agriculture, a National Pulse Development
Programme that covered almost 13 states was set up in 1986 with the aim to introduce the
improved technologies to the farmers. A Technology Mission was introduced in 1986 right
after the success of National Pulse Development Programme to boost the oilseeds sector in
Indian economy. Pulses too came under this programme. A new seed policy was planned to
provide entree to superior quality seeds and plant material for fruits, vegetables, oilseeds,
pulses, and flowers.
The Indian government also set up Ministry of Food Processing Industries to stimulate
the agriculture sector of Indian economy and make it more lucrative. India's agriculture
sector highly depends upon the monsoon season as heavy rainfall during the time leads to a
rich harvest. But the entire year's agriculture cannot possibly depend upon only one
season. Taking into account this fact, a second Green Revolution is likely to be formed to
overcome such restrictions. An increase in the growth rate and irrigation area, improved
water management, improving the soil quality, and diversifying into high value outputs,
fruits, vegetables, herbs, flowers, medicinal plants, and bio-diesel are also on the list of the
services to be taken by the Green Revolution to improve the agriculture in India.
MAJOR CHALLENGES CONFRONTING THE AGRICULTURE SECTOR
Two major developments have occurred in the past few weeks that are directly
related to production of agricultural commodities and their marketing. Firstly, the
government decided not to export surplus wheat stock of two million tons because of fall in
wheat prices in the international market. This would have had sustained huge losses for
which it was not prepared. Earlier in Punjab, soon after harvesting of wheat crop in
March/April, wheat price crashed to Rs750 per 40 kg in open market against government’s
support price of Rs950.0 per 40 kg. The Punjab government should have placed itself in the
market well before intervention of the private sector to procure wheat at the official price.
But, it was seriously constrained due to fiscal crunch with the result that small farmers
suffered substantially at the hands of market exploiters.
Secondly, like the previous year, sugar crisis is once again taking shape before
Ramadan. Price of sugar has surged by Rs7.0 to Rs70 per kg within a few weeks. It is likely
to escalate further because of shortage in production last year. It registered 3.1 million tons
against consumption of 4.3 million tons with a deficit of 1.2 million tons. Last year,
sugarcane supply was 46 million tons but mill owners kept the production low to keep the
commodity’s price high in the market.
The government is in the process of importing sugar. Sugar crisis, basically artificial
and created by powerful cartels to make profits at the cost of consumers, can be averted in
case the government succeeds to import sugar well before commencement of Ramadan.
Nevertheless, wheat price crash and the likely increase in sugar prices raise many
questions about the production and marketing policies of the government and private
sector’s desire for huge profits.
Agriculture sector is the backbone of the economy. It contributes 21.0 per cent
towards GDP growth and employs more than 45.0 per cent of the workforce in rural areas.
Despite this the sector hardly gets the attention it deserves from the economic managers,
with the result that growth in the sector in past six years averages to 3.7 per cent per
annum, which is much less than its potential of almost 6 to 7 per cent. During the last fiscal
year the sector grew by 2.0 per cent against the set target of 3.8 per cent.
The agriculture sector suffers from a few core problems at different stages of
producing major and minor crops. These include shortage of irrigation water, non-
availability of quality seeds and pesticides, insufficient credit facilities to farmers, poor
execution of support prices, high cost of inputs and irregular weather conditions. The
overall result is low per acre yield of crops. According to the economic survey, major crops
that account for 32.8 per cent of value-added products registered a negative growth of 0.2
per cent against robust growth of 7.3 per cent during FY-10. Minor crops that contribute
11.1 per cent to the overall agricultural produce also registered a negative growth of 1.2
per cent.
This means that growth volatility in agriculture sector is high and can be rectified by
addressing the core issues faced by the sector on a priority basis and with full commitment.
The farming community looks to the government to support it through subsidies on
fertilizers and electricity. The government, on the contrary, faces difficulty to help the
community because it is committed to the IMF to withdraw all sorts of subsidies. Subsidy
for the agriculture sector has been either withdrawn or reduced. It has made agricultural
products expensive. On the other hand, the government announces yearly support prices
and it counts a lot to induce farmers to opt for higher agricultural produce, in case they are
to get reasonable prices. The government, soon after coming into power in 2008, increased
the support price of wheat to Rs950 per 40 kg, with the aim of discouraging its smuggling
to India and Afghanistan and meeting the demands of the farming community that resented
the high cost of inputs. Due to the quantum jump in the price of wheat, food inflation
prevailed.
Furthermore, there are a number of problems related to effective marketing of
agricultural products. It is quite common for the middlemen or sugar mill owners to
withhold stocks to create scarcity to earn huge profits. The food departments of the
provinces are responsible for making markets vulnerable to profit making by constricting
the marketing of ready stocks through bureaucratic red tapism.
The price-hike in sugar, a year earlier, from around Rs30 per kg was manipulated by
creating an artificial shortage by mill owners and market dealers. They successfully
adopted a defiant posture against the orders of higher judiciary to sell sugar at Rs40.0 per
kg. Since then the sugar prices have been moving upward. The brewing of sugar crisis at
present would once again provide them an opportunity to make easy money by exploiting
the market and keeping the government on the sidelines because most of the sugar barons
have access to the corridors of power. According to an estimate in the previous sugar crisis,
market exploiters and mill owners made around $1.0 billion. It clearly brings out the
necessity of improving governance and monitoring the market so that market players are
held accountable for their misdeeds.
The government adopts measures such as selling commodities like sugar at
comparatively lower prices at utility stores, but this is also not without problems for the
consumers. Utility stores cannot cater to the large number of consumers that throng to the
stores and return with a lot of disappointment. The government needs to streamline
marketing of raw and value-added agricultural products. It should focus on improving the
production of food items by improving supply of irrigation water, reducing cost of inputs
and providing reasonable support prices to farmers that should not fuel inflation. At the
same time, it should monitor the market players, mill owners and dealers. It should take
punitive action against profiteers and hoarders. Unless concrete measures are taken in this
regard, the agriculture sector would continue to underperform and consequently, this
would obstruct the food security.
AN EVOLUTIONARY VIEW OF INDIAN AGRICULTURE
Traditional wisdom relating to agriculture dates back around 12,000 years when the
first plants were domesticated by humans. This wisdom has since been evolving through
accumulated experiences in dealing with situations and problems, and has been recorded
and channeled down the generations.
Our ancient literature, which was most likely composed between 6,000 BCE and
1,000 ACE contains a lot of information on agriculture. This includes the four Vedas, the
nine Brahmanas, the Aranyakas, Sutra literature, the Sushruta Samhita, the Charaka
Samhita, the Upanishads, the epics Ramayana and Mahabharata, the 18 Puranas, and texts
such as the Krishi-Parasharas, Kautilya’s Arthashastra, the Manusmriti, Varahamihira’s
Brhat Samhita, the Amarkosha, and the Kashyapiya-Krishisuktiand Surapala’s
Vrikshayurveda. Kautilya’s Arthashastradeals with the agriculture of his time;
Vrikshayurveda provides information on how to combat plant problems through various
traditional practices and utilizing available resources. Even in the poems of Ghagh
kahawaten one comes across descriptions of agro-management, timing and forecasting of
weather, and crop yields.
Traditional farming systems appear to be complex and advanced as they exhibit
important elements of sustainability: for instance, they are well adapted to the particular
environment, rely on local resources, are decentralized, and, overall, tend to conserve the
natural resource base. The ancient texts referred to contain information on farm
implements to be used, types of land, monsoon forecasts, manure, irrigation, seeds and
sowing, pests and their management, horticulture, etc. The fertile status of the soil in most
parts of our country is a result of the wisdom of our forefathers.
Farmers work with dynamic knowledge systems that co-evolve with time as circumstances
change. They learn and unlearn, choosing the appropriate knowledge in their struggle to
earn a livelihood. While scientists rely on averages, the knowledge of local people is
dynamic and up-to-date, continually revised as conditions alter.
The integration of scientific knowledge systems with indigenous knowledge systems
is vital to make agriculture sustainable. We need to maintain the health of the soil in the
interest of future generations. Some civilizations view soil as sacred, inviolate, something
that must be handed down to coming generations intact, if not improved. Even today, it is
proving difficult to find terms equivalent to the ethnic names of soils (with particular or
combinations of properties) in many classification systems. The integration of knowledge
systems is important because farmers are much more accurate about their nomenclature
for identifying soils and their suitability for varied uses.
Indigenous technical knowledge is the systematic body of knowledge acquired by
local people through the accumulation of experiences, informal experiments, and an
intimate understanding of the environment. Over the years, the impact of traditional and
indigenous knowledge on agriculture has diminished due to the introduction of a synthetic,
chemical fertilizer system during the Green Revolution to attain so-called ‘self-sufficiency’
in food production. But the consequences of dousing the soil with deadly chemicals are
being observed in the form of deteriorating soil fertility, contamination of the natural
resource base and an increase in crop pest and disease outbreaks. As a result, food
producers and consumers are faced with an array of problems on the environment, ecology
and health fronts. Eventually, a revival of sustainable, ecologically safe and socially sound
practices is being sought by recognizing and retrieving traditional wisdom in agriculture.
The indiscriminate use of chemical fertilizers, hybrid seeds and pesticides has
resulted in various environmental and health hazards coupled with socio-economic
problems. Though agricultural production overall continues to increase, the rate of yield
per hectare has begun to decline. The causes of the environmental crisis are, in fact, rooted
in the prevalent materialistic paradigm, which promotes high-input technologies and
practices in all sectors (domestic, agriculture, industrial, services) leading to soil erosion,
Stalinization, all types of pollution, desertification, and biodiversity loss.
In the agriculture sector, the Green Revolution selected crops for high yield and
palatability. By sacrificing natural resistance for productivity, it made crops more
susceptible to pests. Since monoculture has been maintained as the structural base of
agricultural systems, pest problems will continue on a negative treadmill that reinforces
itself, as more and more vulnerable crops call for increasingly destructive or expensive
high-tech protective measures.
Thus, any gain in production is associated with pain of various kinds and
magnitudes. The results of the Green Revolution have proved to be a paradox: on the one
hand, it offered technology as a substitute both for nature as well as for politics, by the
creation of abundance and peace. On the other hand, the technology itself demanded more
intensive natural resource use along with intensive external inputs and a restructuring of
the way power was distributed in society. While treating nature and politics as dispensable
elements in agricultural transformation, the Green Revolution brought about major
changes in natural ecosystems and agrarian structures. Sir Albert Howard, who was
associated with the Pusa Agriculture Research Centre, made an almost prophetic
declaration at the beginning of the 20th century about the emerging practices of modern
farming.
He said: “These mushroom ideas of agriculture are failing; mother earth deprived of
her manorial rights is in revolt; the land is going on strike; the fertility of the soil is
declining… Soil is no longer able to stand the strain. Soil fertility is rapidly diminishing
particularly in the US, Canada, Africa, Australia, New Zealand. The loss of fertility all over
the world is indicated by the growing menace of soil erosion. Diseases are on the increase,
the diseases of crops and animals which feed on them.”
Though they may have sounded like an exaggeration at the time, Howard’s
predictions have all come true, in a magnified way. As history shows, former civilizations
were able to overcome economic and cultural decline when the ecosystems which made up
their environment remained intact and free from interference. Avoiding detrimental
changes in material cycles and energy fluxes, and preventing the loss of biological diversity
in our natural environment are of utmost priority among the goals of sustainable
development.
Soil is the basis of all human life. Destruction of the soil has contributed to the fall of
past civilizations, yet the lessons of history are seldom acknowledged and usually
unheeded. The only hope for a healthy world rests on re-establishing harmony in the soil
that has been disrupted by modern methods of chemical farming and unplanned rapid
industrial growth. These methods bring about serious problems through land degradation.
Today’s cropland losses impair the wellbeing of the living as well as of generations to come.
The idea of sustainable agriculture is a response to the decline in quality of produce
and of the resource base associated with modern farming. It captures a set of concerns
about agriculture conceived as a result of the co-evolution of socio-economic and natural
systems. Agricultural development resulting from the complex interaction of a multitude of
factors, and a wider understanding of the agricultural context, requires the study of
relations between farming, the environment and social systems. It is through this deeper
understanding of the ecology of farming that doors will open to new technological and
management options that are more in tune with the aims of a truly sustainable agriculture.
The goal is to develop agro-ecosystems with minimal dependence on high agro-chemical
and energy inputs, and in which ecological interactions and synergies between biological
components provide the mechanisms for systems to sponsor their own soil fertility,
productivity and crop protection. The five objectives of productivity, security, protection,
viability and acceptability are called the five pillars of sustainable land management, and
they must be achieved simultaneously if true sustainability is to be predicted.
In fact, sustainability is not possible without preserving the cultural diversity that
nurtures local agriculture. A closer look at ethno science (the knowledge system of an
ethnic group that has originated locally and naturally) will indicate that local people have
enormous knowledge about the environment, vegetation, animals and soils. Peasant
knowledge about ecosystems usually results in multi-dimensional land use production
strategies which generate, within certain ecological and technical limits, the food self-
sufficiency of communities in particular regions. Stable production can only take place
within the context of a social organization that protects the integrity of natural resources
and nurtures harmonious interactions among humans, the agro-ecosystem and the
environment. Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their own needs.
The basic tenets of a sustainable agricultural system are conservation of renewable
resources, adaptation of the crop to the environment, and maintenance of a moderate but
sustainable level of productivity. And it should be economically viable and socially
acceptable.
The production system must:
o Reduce energy and resource use and regulate overall energy inputs so that the
output-input ratio is high.
o Reduce plant nutrient losses by effectively controlling leaching, runoff and erosion,
and improve nutrient recycling through the promotion of legumes, organic manure
and compost, and other effective recycling mechanisms -- residue management.
o Encourage local production of feed items adapted to the natural and socio-economic
setting.
o Sustain desired net output by preserving natural resources (by minimizing soil
degradation).
o Reduce costs and increase the efficiency and economic viability of small- and
medium-sized farms, thereby promoting a diverse, potentially resilient agricultural
system.
From a management point of view, the basic components of a sustainable agro-
ecosystem include:
o Vegetative cover as an effective soil- and water-conserving measure, met through
the use of no-till practices, mulch farming, cover crops, etc
o A regular supply of organic matter through regular addition of manure and compost,
and promotion of soil biotic activity.
o Nutrient recycling mechanisms through the use of crop rotation, crop/livestock
systems, use of legumes, etc.
o Pest regulation assured through enhanced activity of biological control agents,
achieved by conserving and multiplying natural enemies in an eco-friendly way.
The ultimate goal of sustainable agriculture system design is to integrate farm
components in a holistic fabric so that overall biological efficiency is improved, biodiversity
is preserved, and agro-ecosystem productivity and its self-regulating capacity are
maintained. The idea is to design an agro-ecosystem that mimics the structure and
function of local natural ecosystems. A major strategy in sustainable agriculture is to
restore agricultural diversity in a given time and space through alternative cropping
systems, such as crop rotation, cover crops, intercropping, border cropping or
crop/livestock mixtures -- all of which exhibit several ecological features. Modern
agriculture is not sustainable as it is not in consonance with economics, ecology, equity,
energy and the socio-cultural dimension. That’s why the world over, environmental
degradation sourced to agriculture is reaching catastrophic proportions.
Time is running out if we are going to continue with more or less the same strategies in
agriculture -- high agro-chemical-responsive hybrids, monoculture, ex-situ bio-control
agents, terminator seeds, and similar technologies. Ironically, the shift from chemical
farming to sustainable agriculture is being sought within a very narrow vision, posing
severe and irreparable risks to the ecosystem in the long run.
The need of the hour is an alternative sustainable farming system that is ecologically
sound, economically feasible and socially just. Sustainable agriculture is a unifying concept,
which considers ecological, environmental, philosophical, ethical and social impacts,
balanced with cost-effectiveness. Several aspects of traditional systems are relevant, such
as their knowledge of farming practices and the physical environment, biological folk
taxonomic systems, and use of low-input technologies. By understanding the ecological
features of traditional agriculture, such as the ability to bear risk, production efficiencies of
symbiotic crop mixtures, recycling of materials, reliance on local resources and
germplasm, exploitation of the full range of micro-environments, etc, it is possible to
obtain important information that may be used to develop appropriate agricultural
strategies tailored to the needs, preferences and resource bases of specific peasant groups
and regional agro-ecosystems.
Among the various alternatives, organic farming is gaining acceptance throughout the
globe as it has the potential to provide practical solutions to mitigate the maladies afflicting
conventional or modern farming. Before India faced the onslaught of chemical farming, its
thinkers like Vinoba, Gandhiji and Kumarappa were able to visualize the future of Indian
farming through their non-violent approach -- aptly suited to the present. Indian culture
imbibed a deep sense of oneness with all things natural. Ancient (Vedic) culture taught
veneration of the earth as mother, the sky as father, the air as [I]prana [/I] (soul), the sun
as energy, and water streams as life-sustaining veins.
The goal of an alternative agriculture system is to enable peasants to become architects
and actors in their own development. From a management perspective, the objective of
such a system is to provide a balanced environment, sustained yields, biologically mediated
soil fertility, and natural pest regulation through the design of diversified alternative
agricultural systems and use of low-input technologies. The strategy is generally based on
ecological principles so that management aims at optimal recycling of nutrients, organic
matter turnover, closed energy flows, water and soil conservation, and balanced
pest/natural enemy populations. By assembling a functional biodiversity, it is possible to
provoke a beneficial symbiosis. These, in effect, subsidize alternative agriculture processes
by providing ecological services such as the activation of soil biology, recycling of nutrients,
and enhancement of beneficial arthropods.
Today there is a whole battery of practices and technologies available that vary in
effectiveness as well as in strategic value. Some, which include practices that are already
part of conventional farming (genetic improvement, minimum tillage, crop rotation) are of
prophylactic value, while others, which are key, are of a preventative nature and act by
reinforcing the ‘immunity’ of the agro-ecosystem. These technologies do not emphasize the
boosting of yields under optimal conditions, as Green Revolution technologies do; rather,
they assure consistency of production under a whole range of soil and climatic conditions --
especially the marginal conditions that usually prevail in small-farm agriculture. The need,
however, is not to focus on particular technologies but rather on an agro-ecosystem
management approach that emphasizes crop diversity, use of manure, green manure,
urban and rural waste, legumes in rotation, animal integration, recycling and use of
biomass and residue, and incorporates an assemblage of suitable alternative technologies.
The role of an alternative agricultural system is not limited to input substitution alone
but ensures that it is economically and ecologically sustainable. Various alternative
agricultural systems include traditional and natural farming, organic agriculture, ecological
farming, Vedic agriculture, permaculture, biodynamic farming and LEISA (low external
input sustainable agriculture). The real success of these systems on an evolutionary
timescale demands that the question of the paradigm of development and the technology
package be considered together.
Resham A. Mansukhani
S.Y.B.Com. ‘A’
Roll No. : 001
Economics – Agriculture Sector
Seva Sadan College of Arts, Science and Commerce